E$4-14($Change in Accounting Principle$)$ Zehms Company began operations in $2013$ and adopted

weighted$-$average pricing for inventory. In $2015,$ in accordance with other companies in its industry, Zehms

changed its inventory pricing to FIFO. The pretax income data is reported below.

Year Weighted$-$Average FIFO

$2013$ $$370,000$ $$395,000$

$2014390,000420,000$

$2015410,000460,000$

Instructions

$($a$)$ What is Zehms$$s net income in $2015?$ Assume a $35\%$ tax rate in all years.

$($b$)$ Compute the cumulative effect of the change in accounting principle from weighted$-$average to

FIFO inventory pricing.

$($c$)$ Show comparative income statements for Zehms Company, beginning with income before income

tax, as presented on the $2015$ income statement